Alcoa (AA) AI Stock Analysis

• Market Cap: $11.56B
• Dividend Yield: 0.85%
• Average Volume (3M): 5.86M
• Price to Earnings (P/E): 10.1
• Beta (1Y): 1.80
• Revenue Growth: 20.08%
• EPS Growth: N/A
• Country: US
• Employees: 13,900
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Aluminum
• EPS (TTM): -0.02
• Shares Outstanding: 258,964,020
• 10 Day Avg. Volume: 5,707,353
• 30 Day Avg. Volume: 5,864,327
• PEG Ratio: -1.24
• Price to Book (P/B): 1.56
• Price to Sales (P/S): 0.66
• P/FCF Ratio: 191.08
• Enterprise Value/Market Cap: 0.83
• Enterprise Value/Revenue: 0.73
• Enterprise Value/Gross Profit: 4.30
• Enterprise Value/Ebitda: 4.50
• 1Y Price Target: $41.86
• Price Target Upside: -11.39% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 3.98
• Revenue Forecast (FY): $12.68B

• Rating: 76 Outperform
• Price Target: $50.00 ▲(5.84% Upside)

Alcoa's overall stock score of 76 reflects a strong financial recovery and bullish technical indicators, which are the most significant factors. The valuation is reasonable, supporting the stock's attractiveness. However, mixed earnings call results and the negative impact of the Kwinana refinery closure temper the overall outlook.

Positive Factors

Revenue Growth

Consistent revenue growth indicates Alcoa's ability to maintain market demand and expand its customer base, supporting long-term business stability.

Operational Efficiency

Improved profit margins reflect enhanced operational efficiency, which can lead to sustainable profitability and competitive advantage.

Strategic Investments

Investments in critical mineral supply chains strengthen Alcoa's market position and align with industry trends towards sustainability.

Negative Factors

Kwinana Refinery Closure

The closure leads to significant restructuring costs and operational challenges, impacting financial performance and workforce morale.

Increased Tariff Costs

Rising tariff costs can erode profitability and affect competitive pricing, posing long-term financial risks for Alcoa.

Alumina Segment Challenges

Declines in the alumina segment revenue indicate potential vulnerabilities in market demand and pricing pressures, affecting overall growth.

Alcoa Business Overview & Revenue Model

Company Description

Alcoa Corporation (AA) is a global leader in the production of aluminum, with a focus on sustainable and innovative aluminum products. The company operates across several segments, including bauxite, alumina, and aluminum, supplying a diverse range of industries such as aerospace, automotive, packaging, and construction. Alcoa emphasizes reducing its environmental footprint through various initiatives and advanced technologies, making it a key player in the transition to a low-carbon economy.

How the Company Makes Money

Alcoa generates revenue primarily through the sale of aluminum products, which include primary aluminum, rolled products, and extrusions. The company also earns income from its bauxite and alumina segments, supplying these essential raw materials for its aluminum production. Key revenue streams include long-term contracts with major customers in sectors such as aerospace and automotive, as well as spot market sales. Alcoa benefits from strategic partnerships and joint ventures that enhance its market presence and operational efficiency. Additionally, the company invests in research and development to innovate and improve its products, which can lead to higher margins and new revenue opportunities.

Alcoa Financial Statement Overview

Summary

Alcoa's financial performance reflects a strong recovery with improved profitability and cash flow. The income statement shows increased revenue and margins, while the balance sheet indicates moderate leverage and effective equity utilization. However, historical fluctuations in financial metrics pose potential risks.

Income Statement

Alcoa's income statement shows a strong recovery with a notable increase in revenue and profitability in the TTM period. The gross profit margin improved to 16.75% from 12.29% in the previous year, and the net profit margin increased significantly to 8.58% from 0.49%. The EBIT and EBITDA margins also saw substantial improvements, indicating enhanced operational efficiency. Revenue growth is positive at 1.26% TTM, reflecting a stable upward trend. However, the company experienced fluctuations in past years, which could pose a risk if market conditions change.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.41, indicating moderate leverage. Return on equity improved significantly to 19.55% TTM, showcasing effective use of equity to generate profits. The equity ratio remains healthy, suggesting a strong capital structure. However, past fluctuations in equity and debt levels highlight potential risks if not managed carefully.

Cash Flow

Alcoa's cash flow statement shows a positive trend with a free cash flow growth rate of 11.86% TTM, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 0.36, reflecting efficient conversion of earnings into cash. The free cash flow to net income ratio is 0.53, suggesting a solid cash position relative to profits. Despite these strengths, historical volatility in cash flow metrics suggests the need for cautious cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	13.26B	12.18B	10.71B	12.76B	12.44B	9.37B
Gross Profit	2.24B	1.50B	241.00M	1.93B	2.62B	765.00M
EBITDA	2.14B	1.09B	155.00M	1.43B	2.06B	972.00M
Net Income	1.15B	60.00M	-651.00M	-123.00M	429.00M	-170.00M
Balance Sheet
Total Assets	15.97B	14.06B	14.15B	14.76B	15.03B	14.86B
Cash, Cash Equivalents and Short-Term Investments	1.49B	1.14B	944.00M	1.36B	1.81B	1.61B
Total Debt	5.16B	2.82B	1.97B	1.87B	1.87B	2.62B
Total Liabilities	9.54B	8.91B	8.31B	8.17B	8.74B	9.84B
Stockholders Equity	6.34B	5.16B	4.25B	5.08B	4.67B	3.31B
Cash Flow
Free Cash Flow	651.00M	42.00M	-440.00M	342.00M	530.00M	41.00M
Operating Cash Flow	1.23B	622.00M	91.00M	822.00M	920.00M	394.00M
Investing Cash Flow	-425.00M	-608.00M	-585.00M	-495.00M	565.00M	-167.00M
Financing Cash Flow	-449.00M	201.00M	57.00M	-768.00M	-1.16B	514.00M

Alcoa Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 47.24
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AA, the sentiment is Positive. The current price of 47.24 is above the 20-day moving average (MA) of 40.65, above the 50-day MA of 38.43, and above the 200-day MA of 31.73, indicating a bullish trend. The MACD of 2.21 indicates Negative momentum. The RSI at 72.59 is Negative, neither overbought nor oversold. The STOCH value of 86.52 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AA.

Alcoa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AA	76 Outperform	$11.56B	10.14	19.77%	0.85%	20.08%	―
KALU	75 Outperform	$1.72B	19.22	12.41%	2.81%	7.69%	91.86%
HL	74 Outperform	$11.52B	56.62	8.88%	0.08%	45.61%	―
CMC	71 Outperform	$7.35B	89.18	1.99%	1.01%	-1.61%	-81.36%
CSTM	64 Neutral	$2.50B	23.06	12.22%	―	8.48%	12.10%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
CENX	61 Neutral	$2.83B	40.47	12.22%	―	20.15%	-72.89%

Alcoa Corporate Events

Alcoa Announces Redemption of 5.500% Notes

On November 25, 2025, Alcoa Nederland Holding B.V., a subsidiary of Alcoa Corporation, announced its intention to redeem all outstanding 5.500% Notes due 2027, totaling $141 million. The redemption, scheduled for December 15, 2025, will be funded using Alcoa’s cash reserves, which stood at $1.49 billion as of September 30, 2025. This move reflects Alcoa’s strategic financial management and could impact its financial position and stakeholder interests.

Alcoa Announces Permanent Closure of Kwinana Refinery

On September 29, 2025, Alcoa Corporation announced the permanent closure of its Kwinana alumina refinery in Western Australia, which had been fully curtailed since June 2024. The decision was influenced by factors such as the refinery’s age, operating costs, and market conditions. The closure will result in restructuring charges of approximately $890 million, with cash outlays expected to reach $600 million over six years. The refinery’s closure will impact approximately 220 employees, with severance costs previously recorded in 2024.